Fortunes in the Dirt and the Cloud
In 1849, thousands poured into California with dreams of gold. In the 21st century, another rush swept the state—this time for tech riches. Both booms reshaped San Francisco and surrounding areas, but what truly stuns are the prices.
From sky-high rents to breakfast costing as much as rent today, the early Gold Rush economy reached levels of inflation that rival—or even eclipse—the housing crunch now plaguing Silicon Valley.
Renting a Room for $10,000 a Month
Bayard Taylor, a journalist for the New York Tribune, arrived in San Francisco in mid-1849. Used to East Coast wages of one or two dollars per day, he was stunned to find professional gamblers renting hotel rooms for up to $10,000 a month—equivalent to about $300,000 today.
In one account, a man who died $41,000 in debt had his real estate appreciate so rapidly that his heirs received an annual income worth $1.2 million in modern value.
Breakfast for $1,200 and Eggs at $90 a Dozen
Basic goods surged in price as demand from miners overwhelmed limited supplies. Edward Gould Buffum, a traveler and chronicler of the period, recounted paying $43 (about $1,200 today) for a simple breakfast of bread, cheese, sardines, butter, and beer.
A loaf of bread with butter could cost the equivalent of $56, a pound of coffee $1,200, and a pickaxe could set a prospector back the modern equivalent of $1,500. A pair of boots? As much as $3,000.
Mining the Miners
While some found gold, many fortunes were built not in the rivers, but around them. One woman earned $18,000 baking pies. A man sold 1,500 old newspapers to news-starved miners for a dollar each.
Entrepreneurs like Philip Armour, Levi Strauss, John Studebaker, and the founders of Wells Fargo started businesses serving prospectors. Their modern counterparts—Zuckerberg, Gates, Page, Brin—built tech empires that also reshaped California’s economy.
Modern Echoes in Silicon Valley
Today, real estate startup CEO Glenn Kelman warned of an exodus from Silicon Valley, where average home prices have crossed $1 million—more than double those in cities like Boston or Portland.
But even those costs pale next to the 1849 economic frenzy. Then, as now, fortune seekers changed the landscape of California—and paid dearly to be part of the dream.
